Pension Risk Transfer Index: November 2011-Dietrich & Associates
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Transcript of Pension Risk Transfer Index: November 2011-Dietrich & Associates
1
PENSION RISK TRANSFER INDEX ™
November 2011 PRT Index Level
86.45 120
Plan/Monitor Opportunistic Settlement Attractive
Sept 2010: PRT Index =82.7
Jan 2009: PRT Index =121.4
80 95 105
Annuitization Attractiveness
110.6 121.4
91.5 90.0
70
80
90
100
110
120
130
140
Jan-08 Jan-09 Jan-10 Jan-11
Annual PRT Index PRT Index
What is the Dietrich Pension Risk Transfer (PRT) Index ™ ? The Dietrich Pension Risk Transfer Index ™ has been designed to create a monthly benchmark that tracks the relative attractiveness of annuitizing accrued pension obligations by considering three key underlying financial ratios Funded Status Level (50% Index Weight) Current /Historical Annuity Rates (30% Index Weight) Annuity Rates vs. Treasury and Corporate Bonds (20% Index Weight)
Commentary: Lower annuity rates and spreads drove index lower despite gains in pension funding levels. The current annuity rate proxy of 3.36% marks a new low, despite currently wide annuity spread levels. Annuities remain attractive for frozen plans with short investment horizons and/or reduced asset return assumptions
Dietrich & Associates does not certify the information nor does it guarantee the accuracy or completeness of such information. Use of such information is voluntary and should not be relied upon unless an independent review of its accuracy and completeness has been performed. Materials may not be reproduced without the express consent of Dietrich & Associates.
Effective 11/1/2011
78.00
83.00
88.00
93.00
98.00
103.00
108.00
Monthly PRT Index PRT INDEX